Adtalem (ATGE) Surges 67.4% in the Past 3 Months: Hold or Fold?

Core Insights - Adtalem Global Education Inc. (ATGE) shares have increased by 67.4% over the past three months, significantly outperforming the Zacks Schools industry and the broader Consumer Discretionary sector [1] - The company is well-positioned to address workforce shortages in the healthcare sector, which has been performing well in recent years [1][5] - ATGE's long-term growth strategy includes revenue growth projections of 4-6% and adjusted EPS growth of 10-15% for fiscal 2025 [7][8] Company Performance - ATGE's stock is currently trading above its 50-day moving average, indicating a bullish trend [3] - The company serves over 85,000 students through its post-secondary programs, which are designed to meet the healthcare industry's workforce demands [5] - The trailing 12-month Return on Equity (ROE) for ATGE is 14.1%, significantly higher than the industry average of 3.8%, indicating efficient use of shareholders' funds [10] Financial Projections - For fiscal 2024, ATGE expects revenues of $1.56-$1.58 billion, an increase from previous estimates of $1.52-$1.56 billion, with adjusted EPS projected at $4.80-$5.00 [8] - The Zacks Consensus Estimate indicates a year-over-year EPS growth of 16.4% for fiscal 2024 and 16.6% for fiscal 2025, although the estimate revision trends suggest limited upside potential [15][16] Industry Context - The U.S. healthcare sector is facing a significant shortage of professionals, with an estimated 200,000 shortage of nurses expected to rise to 400,000 by 2025, which poses challenges for the industry [13] - Proposed new Gainful Employment (GE) regulations by the U.S. Department of Education may impact ATGE's Title IV eligibility, requiring programs to meet specific debt-to-earnings ratio thresholds [14]